Virgin Mobile is set to begin selling a pay-as-you-go iPhone 4 and iPhone 4S – and that could spell trouble for Sprint and Verizon Here’s why: Virgin’s contract-free service starts at just $30 a month; $50 a month gets you unlimited data and unlimited talk minutes.

If you’re locked into a far more expensive plan, that might be painful news. The good news is, Verizon, Sprint and Virgin use CDMA, a channel access method that is an alternative to the GSM system used by AT&T. If you just bought a Verizon iPhone (like I did), you can unlock it and use it on Virgin’s network.

If you’re a family plan customer (like I am), I figure you’ll save at least $1,500. You can go in with three of your friends on a single courtside seat at tonight’s Celtics-Heat Game 5 matchup. Or ... at least you’ll have unlimited data. You can stream the whole game to your phone.

Here’s how Virgin’s new pay-as-you-go service stacks up to competition:
Even the cheapest cheapskate, getting unlimited data for $80 a month on an iPhone 4S through Sprint, will pay about $750 more over his two-year contract – even though he gets a $450 discount on the phone itself. (Virgin is charging the full $650 for the new iPhone 4S.)

That’s got to burn. The Sprint customer presumably gets the same wireless service as the Virgin customer. A Virgin Media Inc. (subsidiary, Virgin Mobile is a mobile virtual network operator: It buys its contract-free wireless network capacity from Sprint Nextel Corp.

But unlocking the iPhone is risky. You could brick the phone. And, the return depends on your new carrier’s willingness to activate Verizon’s unique ESN/MEID number on their network. I’m guessing we may find new, discount carriers entering the market more willing to bend the rules that way.

Virgin Mobile isn’t the first carrier to offer a contract-free iPhone: Cricket Wireless announced a similar program last month. Cricket also uses CDMA, and hacker bloggers have been posting for at least a year on how you can unlock your Verizon iPhone and put it on Cricket’s much cheaper network. You can also flash a Verizon iPhone over to MetroPCS another discount carrier that uses CDMA.

Is the wireless industry going the same way as the airlines? Cheaper options are opening up under the major carriers’ lock on the most desirable phones. And, in my experience (I was a Virgin Mobile customer for about a year), claims of better service on Verizon largely come down to perception and advertising. With more people clamoring for safe ways to unlock Verizon and Sprint phones, I wouldn’t be surprised to see new unlock hacks emerge via reputable sources.

I’ll still have to pay Verizon to break the contract, but on the other hand I’m not paying for a new phone. Basically I’d pay about $600 up-front to go from $190 a month to $80 a month.

Comparing Virgin’s $40, 1,200-minute plan with Sprint’s $80, 450-minute plan, which includes nights and weekends, and also adds about $10 per month in fees.